GM, Ford to ask UAW for new lower-pay tier

New pay rate would lower labour costs for automakers

03/25/2015|labour-reporter.com|Last Updated: 03/25/2015

(Reuters) — U.S. automakers General Motors Co and Ford Motor Co are considering asking the United Auto Workers union to create a new tier of lower-paid union workers in their U.S. factories, Bloomberg reported, citing people familiar with the matter.

The UAW currently has a two-tier wage system, that includes top-paid $28-an-hour assembly workers and the lower-paid second tier, whose wages top out at $19.28.

The automakers would be pushing forth for a third tier wage system for certain lower-skilled jobs, Bloomberg said.

"For the 2015 negotiations, we're open to discussing many different solutions with our UAW partners that will allow us to continue to employ a competitive labour rate and add U.S. jobs and investment," Ford spokeswoman Kristina Adamski said in a statement.

A new pay rate for lower-skilled jobs would help the automakers bring down labour costs as they compete with Asian and European rivals that pay less at non-union U.S. plants, the report said.

GM and Ford have much higher labour costs than their cross-town rival Fiat Chrysler Automobiles FCHA.MI, according to a study released just ahead of a meeting of United Auto Workers officials as they prepare for contract talks with the Detroit Three.

GM's U.S. auto workers on average earn about 21 per cent more in wages and benefits than their counterparts at Fiat Chrysler, reflecting the much higher percentage of lower-paid, entry-level workers at FCA, according to a study of 2014 labour costs by the Center for Automotive Research (CAR).

"We aren't going to comment on potential topics in upcoming negotiations... we are committed to working with our UAW partners on solutions that will benefit employees and improve GM's competitiveness," GM spokeswoman Katie McBride said in an email.